You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

August 30, 2019

Why Myanmar Should Sign the New Singapore Mediation Convention

Subscribe to Updates
The Myanmar Times

One of the problems international businesses face in doing business in Myanmar is dispute resolution. The Myanmar court system is opaque and extremely slow, and local litigators charge surprisingly high fees. Arbitration is an obvious solution to this problem, and following the Myanmar Arbitration Law (2016) (AL) almost all commercial contracts of substantial value now contain arbitration clauses, usually for arbitration abroad-most commonly at the Singapore International Arbitration Centre (SIAC). This is because the AL allows for the enforcement of foreign arbitral awards where the award was made in a state that is a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958), in all but a limited range of circumstances. The AL also paves the way for domestic arbitration, although I would imagine it will be several years before the arbitration centre recently established by the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI) finds its feet.

However arbitration, particularly foreign arbitration, can remain an extremely expensive method of dispute resolution. Now, as a result of the Convention, mediation is likely to become a more popular alternative dispute resolution method in many countries.

Mediation is much cheaper and faster than litigation or arbitration, and therefore is worth carefully considering as an option, particularly in relation to smaller disputes. Legal advice is required, as it will not always be appropriate. It works in this way. Following the process of mediation facilitated by a mediator, the parties come to an agreement to settle their dispute. The problem in the past has been that there has been no simple way to enforce such a settlement agreement at the end of the mediation process. The Convention changes this.

Note that under the Convention the settlement agreement must be international, in the sense that at least two parties to the settlement agreement have their places of business in different States, or the State in which the parties to the settlement agreement have their places of business is different from either (i) the State where a substantial part of the obligations under the settlement agreement is performed or (ii) the State with which the subject matter of the settlement agreement is most closely connected.

Forty-six countries have already signed the new Singapore Mediation Convention, including Singapore itself. The Convention provides that a party to the Convention shall enforce a settlement agreement in accordance with its rules of procedure and in accordance with the Convention.

As with foreign arbitral awards, there are limited circumstances in which a settlement agreement may not be enforced. For example, the settlement agreement is not final according to its terms, or there was a serious breach by the mediator of applicable standards without which that party would not have entered into the settlement agreement, or granting relief would be against public policy.

Myanmar has made great progress in terms of arbitration. It should not be left behind with the potential of mediation as another form of alternative dispute resolution.

 

This article was originally published in the Myanmar Times and is reproduced here with permission and thanks. The original can be viewed on the Myanmar Times website. 

Related Professionals

Practices

Dispute Resolution and Litigation

Location

RELATED INSIGHTS​ 

October 14, 2021
As part of its membership in Lex Mundi, Tilleke & Gibbins has published an updated edition of its Guide to Doing Business in Thailand for 2021. This guide outlines all of the key factors for starting and operating a business in the Thai market. Issues covered include: Investment incentives Financial facilities Exchange controls Import and export regulations Structures for doing business Requirements for the Establishment of a Business Operation of the Business Cessation or Termination of the Business Labor legislation, relations, and supply Tax Immigration requirements This publication is part of Lex Mundi’s Guides to Doing Business series prepared by member firms in more than 100 jurisdictions worldwide. The guides serve as a useful resource when planning an international business strategy or researching a new market.
Read More
October 7, 2021
The fast and efficient movement of goods is a hallmark of the modern global supply chain. In fact, it is often an expectation, with contractual commitments dependent on the timely and problem-free delivery of goods to the destination country. If unexpected costs or unreasonable delays occur, importers can find themselves liable to customers or beneficiaries, resulting in reduction or even elimination of anticipated revenue. One area of particular importance for importers is the customs clearance and assessment process, which is often one of the last but most critical phases of the global supply chain. Importers, regardless of their experience or sophistication, have a duty to understand and comply with all applicable laws and regulations for the importation and classification of goods sent from other countries. While Thailand, like many countries, is a member of the World Trade Organization (WTO) and is obliged to adhere to WTO guidelines for the valuation and classification of goods. It also has its own regulations, policies, and customs laws that provide a legal framework for customs assessment challenges by importers. Often, importers or their agents can effectively process and clear goods with the assigned customs officials without encountering any issues. However, disputes do inevitably arise, often relating to origin, classification, and duty assessment. If not addressed early, a dispute can escalate, leading to seizure of goods, posts of guarantees, final assessments by customs authorities, and even allegations of civil or criminal wrongdoing. At such an advanced stage, it may be too late to engage in consultation to achieve a dispute settlement. Instead of risking such a predicament, importers seeking to resolve disputes with customs officials should explore pre-assessment consultation opportunities. At this stage, there remains flexibility in approach and time to consult with customs officials, make submissions, and consider a flexible settlement. If this
Read More
September 30, 2021
A liquidated damages clause is a quick and straightforward way to determine the amount of compensation payable by a breaching party to the aggrieved party in the event of IP infringement or another contract violation. The enforceability of such a clause in Vietnam remains a controversial topic, but some recent IP-related cases may shed some light on the applicability of such provision.
Read More